Mecox Lane, Giosis to Re-launch M18 as Open Platform Site
Mecox Lane, 11/21/12
Chinese B2C mail-order e-commerce company Mecox Lane (Nasdaq: MCOX) today announced that its board of directors has approved a transaction with Korean e-commerce firm Giosis to form a joint venture, Giosis Mecoxlane Ltd., to operate a dynamic online marketplace in China, which would include use of the company's M18.com website. M18.com would be redesigned to attract a number of competing and independent sellers and brands. The two companies are hoping to expand their presence in the fashion e-commerce market.
The Giosis Mecoxlane management team would include Giosis founder and chief executive officer, Ku Young-Bae, who would lead the joint venture. Ku was the founder of Gmarket Inc., an online marketplace in Korea, and served as its chief executive officer from 2001 to 2009.
As contemplated in the transaction documents, the initial capital contributions from Giosis and Mecox Lane to Giosis Mecoxlane would be USD 15 mln and USD 5 mln in cash, respectively. Giosis would also contribute a non-exclusive license to its online marketplace technology and related intellectual property, as well as assemble the management team. Mecox Lane would contribute certain non-cash assets, including the domain name M18.com and certain trademarks. Upon the closing of the transaction, Giosis would initially hold 60% and Mecox Lane would initially hold 40% of the outstanding equity interests of Giosis Mecoxlane, assuming the conversion of the Series A Preferred Shares of Giosis Mecoxlane.
Mecox Lane expects to sell its branded merchandise, including apparel, on the re-launched Giosis Mecoxlane online marketplace, as well as on other third-party e-commerce websites in China. Giosis Mecoxlane would offer Mecox Lane most favored pricing terms and commission rates for the sale, display, marketing and promotion of merchandise supplied by Mecox Lane.
Mecox Lane will continue to market and sell merchandise through its call center and physical stores. Giosis Mecoxlane is in separate discussions withMecox Lane to utilize Mecox Lane's warehouses, distribution centers and delivery network. Mecox Lane also plans to form a new company to serve the logistics and order-fulfillment needs of its customers and third parties.
Editor's Note: For more background on this topic, please see "Mecox Lane Denies Being Acquired by Giosis Group" MD 10/28/12 issue.
Keywords: Giosis Mecoxlane Ku Young-Bae apparel e-commerce m18.com Internet B2C MCOX logistics Mecox Lane open platform Giosis online fashion